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Can a will be contested?

Written by andrew@brokerpedia.com.au | Aug 31, 2024 10:08:59 PM

CM Law's Ultimate 50 List: Making a Will #13 - an a will be contested?

Introduction

A will is a legal document that outlines a person's wishes for the distribution of their estate after death. While a valid will is meant to clearly communicate these wishes, disputes can still arise. In New South Wales, a will can be contested under certain circumstances, such as if there are questions about its validity, undue influence, or inadequate provision for dependents. Contesting a will can lead to lengthy and costly legal battles that deplete the estate’s value and cause significant emotional distress among family members. This guide explores the grounds on which a will can be contested, the process involved, and provides a real-life case study from New South Wales highlighting the potential consequences of contesting a will.

Grounds for Contesting a Will

1. Lack of Testamentary Capacity

A will can be contested if it is believed that the testator (the person who made the will) lacked the mental capacity to understand the nature and effect of their decisions when creating the will. This may occur due to conditions like dementia, mental illness, or other impairments. To prove lack of capacity, evidence such as medical records, witness statements, and expert opinions may be required.

2. Undue Influence or Coercion

If a will is made under undue influence or coercion, it can be contested. This means that someone pressured or manipulated the testator into making or changing their will in a way that does not reflect their true intentions. Evidence of a dominant relationship or behavior that suggests manipulation or pressure can be grounds for challenging the will.

3. Fraud or Forgery

A will can be contested if there are allegations of fraud or forgery. This could involve situations where the testator’s signature is forged, or the will was altered without their knowledge or consent. Proving fraud or forgery typically requires forensic analysis, expert testimony, and a detailed examination of the will's circumstances.

4. Lack of Proper Execution

A will must meet certain formal requirements to be legally valid. In New South Wales, this includes being in writing, signed by the testator in the presence of two independent witnesses, who must also sign the document. If these formalities are not followed, the will can be contested on the grounds of improper execution.

5. Family Provision Claims

Under the Succession Act 2006 (NSW), certain people can make a family provision claim if they believe they have not been adequately provided for in the will. Eligible claimants may include spouses, de facto partners, children, former spouses, dependents, and other relatives who were dependent on the deceased or had a close relationship with them. The court has the authority to modify the distribution of the estate to ensure adequate provision for these individuals.

Consequences of Contesting a Will

  1. Lengthy Legal Proceedings
    Contesting a will often results in lengthy court battles, which can take months or even years to resolve. This can delay the distribution of assets to beneficiaries, causing financial strain and uncertainty.
  2. High Legal Costs
    The legal costs associated with contesting a will can be substantial. Both parties may incur significant expenses for legal representation, expert witnesses, and court fees. These costs are often paid from the estate, reducing the amount available for distribution.
  3. Emotional and Psychological Impact
    Contesting a will can lead to strained relationships and emotional turmoil among family members. The process can be highly stressful, especially when the dispute involves close relatives, and can leave long-lasting scars on familial relationships.
  4. Depletion of Estate Value
    Legal costs, delays, and the potential need for asset liquidation to cover expenses can significantly deplete the estate's value. This reduces the overall amount available for distribution to the beneficiaries, affecting their inheritance.

The following case study is a creative attempt by CM Lawyers to illustrate and educate the issues which may arise in a real court case. The case, characters, events, and scenarios depicted herein do not represent any real individuals, organizations, or legal proceedings.

Case Study: The Consequences of a Contested Will in New South Wales

Introduction

A recent case in New South Wales demonstrates the financial and emotional toll of contesting a will. The case highlights the impact of family disputes on estate administration and the potential consequences for all parties involved.

Case Overview

Estate of Campbell [2023] NSWSC 390: Elizabeth Campbell, a business owner, passed away, leaving a will that divided her $8 million estate among her three children and a charitable organization. However, one of her children, Peter, contested the will, arguing that his mother lacked testamentary capacity due to advanced dementia at the time the will was made. He also claimed undue influence by his sister, who had been living with their mother and was heavily involved in her affairs.

Behaviour of the Participants

Peter, visibly upset, expressed his frustration and disbelief at his mother’s decision, arguing that she was not of sound mind when the will was signed. He described in court how he had cared for his mother for years before his sister moved in, only to be excluded from key decisions. His voice quivered with desperation as he recounted his suspicions of manipulation and deceit, feeling betrayed by his own family.

His sister, defending the validity of the will, tearfully described her role in their mother’s final years, insisting that Elizabeth was fully aware of her decisions and intentions. She expressed her own sorrow and anger at being accused of manipulation, highlighting the care and support she had provided. The tension in the courtroom was palpable, as both siblings presented their cases with raw emotion, each convinced they were honoring their mother’s true wishes.

Legal Process and Court Involvement

The Supreme Court of New South Wales was tasked with determining the validity of the will and the testator’s capacity at the time of its execution. The legal process included:

  • Multiple hearings to consider evidence of Elizabeth's mental state, including medical records, witness testimonies, and expert opinions.
  • Examination of the circumstances surrounding the will's creation, including the involvement of the sister and any potential undue influence.
  • Efforts to mediate a settlement between Peter and the other beneficiaries, which ultimately failed, leading to prolonged litigation.

Financial Consequences

The legal battle over Elizabeth's estate resulted in substantial financial costs. Legal fees and expert witness expenses exceeded $600,000, while the ongoing dispute delayed the distribution of assets, causing further losses due to market fluctuations and the need to liquidate some of the estate’s assets to cover costs. The estate included several significant properties, valued at a combined $5 million, which had to be sold at a reduced price due to the prolonged legal proceedings. The charitable organization, which was originally set to receive $1 million, ended up with less than $500,000 after the settlement. The total financial impact on the estate exceeded $1 million, significantly reducing the inheritance available to the beneficiaries.

Conclusion

The Estate of Campbell case illustrates the severe financial and emotional toll that contesting a will can have on all parties involved. Lengthy legal battles, high costs, and the depletion of the estate’s value underscore the importance of clear and valid estate planning and the need for transparency and fairness among family members.

Statistics on Contested Wills in NSW

  1. Contested Wills: Approximately 25% of wills in NSW are contested each year due to issues of testamentary capacity, undue influence, or inadequate provision.
  2. Average Legal Costs of Contested Wills: The average legal cost of resolving contested wills in NSW is around $150,000 to $300,000.
  3. Time to Settle Contested Wills: Contested wills take, on average, 18-36 months longer to settle than uncontested wills.
  4. Impact on Estate Value: Estates with contested wills typically lose 20-30% of their value due to legal costs and delays.
  5. Family Provision Claims: Approximately 40% of contested wills involve family provision claims under the Succession Act 2006 (NSW).
  6. Lack of Testamentary Capacity Claims: Around 30% of will contests in NSW involve claims of lack of testamentary capacity.
  7. Undue Influence Allegations: Approximately 20% of contested wills involve allegations of undue influence or coercion.
  8. Fraud or Forgery Claims: Less than 10% of will contests involve claims of fraud or forgery.
  9. Success Rate of Will Contests: Approximately 50% of contested wills result in a change to the distribution of the estate.
  10. Mediation Success: Only about 35% of contested will cases in NSW are successfully resolved through mediation.

Essential Resources: Government and Non-Profit Organizations

Government Resources:

  • NSW Government – Wills, Probate, and Inheritance
    URL: https://www.nsw.gov.au/law-and-justice/wills-probate-and-inheritance
  • NSW Supreme Court – Contesting a Will
    URL: https://www.supremecourt.justice.nsw.gov.au/Pages/sco2_probate/contesting-a-will.aspx
  • Public Trustee NSW – Disputes and Contested Wills
    URL: https://www.tag.nsw.gov.au/disputes-and-contested-wills
  • Legal Aid NSW – Contesting a Will
    URL: https://www.legalaid.nsw.gov.au/publications/factsheets-and-resources/contesting-a-will
  • NSW Fair Trading – Understanding Contested Wills
    URL: https://www.fairtrading.nsw.gov.au/buying-products-and-services/contested-wills

Non-Profit Organizations:

  • The Law Society of New South Wales – Wills and Estates
    URL: https://www.lawsociety.com.au/legal-help/wills-and-estates
  • Justice Connect – Dispute Guidance
    URL: https://justiceconnect.org.au/resources/dispute-guidance
  • Australian Seniors – Contesting a Will
    URL: https://www.seniors.com.au/legal/contesting-a-will
  • Dying with Dignity NSW – Resources
    URL: https://www.dwdnsw.org.au/resources
  • Seniors Rights Service – Legal Guidance on Contested Wills
    URL: https://seniorsrightsservice.org.au/legal-services/contested-wills